cavirtex

I’d wanted to have some bitcoin for a while to experiment with, and recently made my first bitcoin purchase at the decentral bitcoin ATM. However, at 5% exchange rate difference compared to an exchange (they use cavirtex as the exchange rate reference), the effective transaction fees are rather steep. While it was an easy way to do things, especially for somebody with no concrete experience with bitcoin, it definitely looked like it was worth setting up an exchange account.

I recall looking into cavirtex, and didn’t like the look of the fees they had, so kept looking. I found another Canadian exchange, www.quadrigacx.com (note: this is a referral link, which would give me a credit if you try out their service and make any purchases), and tried it out. Like cavirtex, you have to provide anti-money-laundering information to fund the account (drivers license, utility bill with address, photo of you with your drivers license, and phone number). They were very fast with the verification (within a couple of hours). However, once my account was verified for funding, I had trouble actually funding it. It turns out that their system currently doesn’t support the chrome browser (or didn’t for me). I tried with firefox and was able to fund it using an online interac transaction.

I wanted to see what sort of fees I’d be hit with for a fund, purchase, transfer out cycle. This was:

A bitcoin purchase of 0.07500000 XBT for $48.80. Quadriga did have a transaction fee for this (in bitcoin, 0.000375 XBT).

A transfer out of my remaining bitcoin (0.07462500 XBT) to a blockchain.info wallet. That transaction had a bitcoin transaction fee of 0.0001. I’m not sure if quadriga or blockchain added that fee.

So, the total fees for this end to end transaction (fund, buy, bitcoin transfer) were 0.000475 XBT (BTC), a total of about 31 cents CAD at 598 CAD/XBT. Not too bad, and definitely better than the ATM fees.

Quadriga’s website can use some UI improvements. The transaction logs hides under account details and you can see that when you click your name, but I didn’t find that at all intuitive (after suggesting it to them as a future improvement they told me where to find it in the UI). Their buy widget also doesn’t have an intuitive way to specify the funds amount in fiat currency. Instead you have to specify the amount in XBT, and once you do that it shows you what that converts to in the fiat currency. Slightly clumsy, but functional.

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I went to the bitcoin ATM today at decentral, in Toronto, on 64 Spadina Ave just south of King St. It has the following awesome sign:

I love their self description “Coworking Space For Disruptive Technology Innovation”. I didn’t think of taking any picture of the ATM, but it worked nicely. Here’s what was required.

First step to make a purchase was entering my phone number. The ATM sends a text message with a verification code to the phone, and you have to enter that into the ATM once it’s received. I am not sure how this would have worked should the battery in my phone have been dead, something happens too easily on my ancient phone these days.

Once the verification code from your phone is entered, you feed in a printout of your wallet’s QR code. Something like:

I deposited $100 and the transaction appeared to go smoothly. The ATM sends a receipt text message to your phone with your wallet and the amount that was deposited. My phone is not a smart phone, something that a bitcoin using generation probably takes for granted, so I wasn’t able to login to blockchain.info and see the new bitcoins in my wallet. The nice guy (who’s name I have now forgotten) at decentral showed me with an app on my phone that the transaction was on the blockchain.

He was able to do that by scanning my QR code, which was interesting. I am surprised about the non-anonymous nature of that blockchain peek. So, it appears that if you advertise your wallet address (which appears to function like a public key) so that you can accept payments, then does that mean somebody could sum the deposits to that address from info available on the blockchain. The work required to do that could be significant, but if anonymity is what you are looking for, some additional steps must be required.

Note that decentral’s ATM does not (at least currently) have any sort of ATM transaction fees, however you still take a hit on the transaction, since the exchange is at a rate 5% greater than the cavirtex CAD/BTC exchange rate (conversely, bitcoin sales at the ATM are at 5% less than this rate). For example, my purchase using $100 CAD was at a buy rate of $681.47/BTC. I see that the cavirtex rate ranged from $636 to $659 today. This must mean that I bought when the ATM believed the cavirtex rate to be $649.

The best way to obtain bitcoin appears that it would be direct person to person transactions for work done, but I don’t currently have any services that I am trying to sell. The decentral “nice guy” suggested that I could potentially do contract work for bitcoin. Since much of my free time has been occupied by studies for the physics courses I have taken, that doesn’t leave much time for moonlighting. Unfortunately, I don’t think there’s much market for the course notes that I have prepared for the courses I have taken. I’ve made all of those available for free. Somebody could tip me bitcoin if they find it useful, but chances of that are pretty slim. The market for this level of physics material is pretty small. For example, when I did the relativistic electrodynamics course, I think there were about 13 people in the course by the time it was done (offered once per year).